Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — FY2019 Earnings Presentation
20 slides from Axalta Coating Systems's earnings presentation, Jan 30, 2020
Slide 1: Q4 & FY 2019 Financial Results
Exhibit 99.2 Q4 & FY 2019 Financial Results January 30, 2020
Slide 2: Legal Notices
Legal Notices Forward-Looking Statements This presentation and the oral remarks made in connection herewith may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including those relating to our 2020 financial guidance, which include
Slide 3: Q4 & Full Year 2019 Highlights
Q4 & Full Year 2019 Highlights Q4 2019 financial results ▪ Net sales of $1,098 million decreased 5.8%; decreased 2.5% ex-FX and excluding a 2.0% impact from a JV interest sale in Q2 2019 ◦ Performance Coatings: Net sales increased 0.3% ex-FX and before JV sale impact ◦ Transportation Coatings: Net s
Slide 4: Q4 & Full Year 2019 Highlights (cont'd)
Q4 & Full Year 2019 Highlights (cont'd) Quarterly end-market observations ▪ Refinish: Strong continued price-mix realization, positive volumes in North America ▪ Industrial: Strong price-mix partially offset lower volumes from weaker demand trends globally ▪ Light Vehicle: Continued price/mix recove
Slide 5: Q4 Consolidated Results
Q4 Consolidated Results Financial Performance Commentary ($ in millions, except Q4 % Change Net sales down modestly ex-FX and per share data) 2019 2018 Incl. FX Excl. FX China JV sale on global demand Performance 730 760 (4.0)% (2.8)% Transportation 369 406 (9.2)% (7.7)% weakness; continued strong p
Slide 6: Q4 Performance Coatings Results
Q4 Performance Coatings Results Financial Performance Commentary Q4 % Change Low single digit organic net sales ($ in millions) 2019 2018 Incl. FX Excl. FX growth ex-FX driven by strong price-mix Refinish 466 456 2.3 % 3.5 % contribution Industrial 264 304 (13.3)% (12.2)% ▪ Refinish volumes flat glo
Slide 7: Q4 Transportation Coatings Results
Q4 Transportation Coatings Results Financial Performance Commentary Q4 % Change Net sales ex-FX driven by volume ($ in millions) 2019 2018 Incl. FX Excl. FX decline, partially offset by Light Vehicle Light Vehicle 291 317 (8.3)% (6.7)% price-mix improvement Commercial Vehicle 78 89 (12.3)% (11.2)% ▪
Slide 8: FY Consolidated Results
FY Consolidated Results Financial Performance Commentary ($ in millions, except FY % Change Net sales declined modestly ex-FX and per share data) 2019 2018 Incl. FX Excl. FX M&A impact; volume pressure largely Performance 2,923 3,033 (3.6)% (0.7)% Transportation 1,559 1,663 (6.3)% (3.3)% offset by p
Slide 9: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Comments ($ in millions) Interest @ 12/31/2019 Maturity ▪ Net leverage lower vs. Q3 2019 due to: Cash and Cash Equivalents $ 1,018 ▪ Higher cash position driven by stronger Debt: free cash flow Revolver ($400 million capacity) Variable — 2021 ▪ Partially off
Slide 10: Comments on 2020 Guidance
Comments on 2020 Guidance ($ in millions, except per share data) 2019A 2020E Comments on 2020 Guidance ▪ Net sales growth expected primarily in Net Sales (4.6)% ~0-1% Performance Coatings offset partly by weaker Commercial Vehicle market demand; coronavirus Net Sales, ex FX, ex M&A (0.5)% ~1-2% effe
Slide 11: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 12: Full Year 2020 Assumptions
Full Year 2020 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Macro backdrop improvement 2020 2019 USD % Impact expected in 2H of 2020 2019 Average Average Currency % Axalta of FX Rate Rate Rate Net Sales Change Assumption ▪ Global GDP growth of ~2.5% ▪ Global industrial production US$
Slide 13: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) FY 2019 FY 2018 Q4 2019 Q4 2018 Income from operations $ 488 $ 442 $ 109 $ 128 Other (income) expense, net (4) 15 (1) 4 EBIT $ 492 $ 427 $ 110 $ 124 A Debt extinguishment and refinancing related costs — 10 — 1 B Termination benefits and other employee rel
Slide 14: Adjusted EBIT Reconciliation (cont’d)
Adjusted EBIT Reconciliation (cont’d) A Represents expenses related to the restructuring and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes to estimates related to employee termination benefits a
Slide 15: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) FY 2019 FY 2018 Q4 2019 Q4 2018 Net Income $ 253 $ 213 $ 42 $ 77 Less: Net income attributable to noncontrolling interests 4 6 1 1 Net income attributable to controlling interests $ 249 $ 207 $ 42 $ 76 A Debt extinguishment an
Slide 16: Adjusted Net Income Reconciliation (cont’d)
Adjusted Net Income Reconciliation (cont’d) A Represents expenses related to the restructuring and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes to estimates related to employee termination bene
Slide 17: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Cash provided by (used in) operating activities $ (58) $ 127 $ 221 $ 283 $ 573 $ (21) $ 142 $ 125 $ 251 $ 496 Purchase of property, plant and equipment (21) (27) (27) (39) (1
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) FY 2019 FY 2018 Q4 2019 Q4 2018 Net income $ 253 $ 213 $ 42 $ 77 Interest expense, net 163 160 40 41 Provision for income taxes 77 54 27 6 Depreciation and amortization 353 369 86 94 Reported EBITDA $ 846 $ 796 $ 195 $ 218 A Debt extinguishment and refi
Slide 19: Adjusted EBITDA Reconciliation (cont’d)
Adjusted EBITDA Reconciliation (cont’d) A Represents expenses related to the restructuring and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes to estimates related to employee termination benefits
Slide 20: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970
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